Ford Announces Separate "Model e" EV Division and "Ford Blue" Internal Combustion Division

[llinthicum1]

Clearly, you haven't mustang shopped for quite a while ...

https://www.caranddriver.com/ford/mustang-shelby-gt350-gt350r

Yes, I realize those are more lofty models, but you made this particular bed so there you go Always be wary of those blanket statements ...

Don't think Ford makes the GT350 any longer. You probably meant Mach 1 or GT500. But, anyway thanks for response. Enjoy your Mustang Mach-e.

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[CopperRobot]

Look at the legacy costs of Ford. Then look at Johnson and Johnson lawsuits related to talcum powder. I know, but hang in here for a few more seconds.

The courts determined the segregated unit for talcum powder could go bankrupt and leave the remaining business intact. Preserving all other business units assets.

Maybe Ford wants to get away from their legacy costs which would all be stuck with Ford in the Red, er Ford Blue.

 

[Carsinmyblood]

Ford has announced a new division set aside for building, marketing, selling EVs. A new division that has no agreements with the existing dealers puts the new "E" division on par with Rivian, Telsa, and others who don't have a multi-billion dollar dealer network to feed.

Can you imagine ordering, paying for and taking delivery of a car without leaving your house or haggling? I think many can, especially if it drops the costs of a sales team, showroom rent, etc.

Thoughts?

 

[ChasingCoral]

Maybe. But remember the dealer monopoly is protected by law in many states.

 

[Kevin P]

They cannot, due to laws many states have concerning car makers not being able to sell directly to consumers. Tesla has skirted the laws with varying success. Ford could in theory try to do something similar, but I doubt it.
https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes

 

[RickMachE]

I guess my question is this - who has read the dealership franchise agreement to see what legal entity the agreement is with, and whether this new division would fall outside that agreement?

I'd bet that it's NOT outside the agreement.

 

[capnhowdy21]

I also don't know if just being a new division divorces them from this agreements. Its not really a new company. I think part of the complaint from investors is this was only a half measure from separating to a new company. I am however no business expert.

 

[TRP]

I would certainly hope so. I have not had a dealer in a long time that I felt really good about dealing with.

I've only had a few experiences that I would consider really good.
1. Ordered a Boss 302 Mustang from a dealer in San Diego and had it drop shipped to me in Illinois. Hassle free.
2. BMW when we bought the wife a 3series sedan. No pressure and was super helpful getting the car spec'd exactly like we wanted.
3. My Mach E experience. Bought a demo from a dealer in Iowa. Deal completed over the phone. Drove up with my trade and left with the Mach E. Salesman was very helpful and knowledgeable of the MME tech.

Almost every other car buying experience I've had felt like a chore and just wanted it to be over with as soon as possible.

I would much rather sit on my couch and order exactly what I want, go sit my the mailbox and wait for delivery

 

[sockmeister]

The division name is so bizarre. "Ford Model e"? That sounds like the name of a vehicle, not a division, lol.

So, will I then be owning a "Ford Model e Mustang Mach-E"?

 

[Carsinmyblood]

I would much rather sit on my couch and order exactly what I want, go sit my the mailbox and wait for delivery

Ford (Farley) is listening.

https://www.thedrive.com/news/41796/ford-would-rather-build-to-order-than-pack-dealer-lots

My Ford dealer had 35 new cars (usually 250) when we picked up my wife's MME last July. This shortage hadn't improved by Sept when we picked up mine. I asked the SM what they were going to do. He said that they're going to take orders and wait. It's cheaper to loose a walk-in than to carry the inventory.

 

[AKgrampy]

I guess my question is this - who has read the dealership franchise agreement to see what legal entity the agreement is with, and whether this new division would fall outside that agreement?

I'd bet that it's NOT outside the agreement.

And if the new EV division were to fall outside then it would follow suit that a new ICE division would too. So I double down on your bet!

 

[rsfloodco]

As someone who is actively trying to buy a Bronco Sport Badlands for my spouse and seeing dealerships want to upcharge $2500-7500 on a mid size SUV, I look forward to no dealers and no haggling. I keep telling these salespeople the same thing. They are only fast forwarding their extinction.

 

[generaltso]

Ford has announced a new division set aside for building, marketing, selling EVs. A new division that has no agreements with the existing dealers puts the new "E" division on par with Rivian, Telsa, and others who don't have a multi-billion dollar dealer network to feed.

Can you imagine ordering, paying for and taking delivery of a car without leaving your house or haggling? I think many can, especially if it drops the costs of a sales team, showroom rent, etc.

Thoughts?

Some people seem to think so. Though the title of the video is pure click bait.

 

[RickMachE]

My opinion of most Youtube videos is that they're garbage clickbait.

 

[RickMachE]

IMHO, there is only 1 reason to separate the P&L for the two divisions. That step is done prior to a disposition (Have been involved in one of these before for a company). Before this announcement, the internets.com was awash in rumors that Ford was spinning off the EV business, but now that I read the announcement I bet they are starting preparations now to eventually, in fact, spin off the ICE business. Probably not for years, but eventually.

Disclaimer: I am not an accountant and don't know what I'm talking about, so any CPAs out there chime in! What would other reasons be for separating all the financials?

As I've stated before, and others have, don't look for a spinoff of anything with the Ford family's ownership.

There are many reasons for splitting. Some are stated by others in the thread. A big reason IMO is that existing auto companies have huge bureaucracy. Enormous. Incompetence is not a fire-able offense, you just get transferred and promoted. I did a summer internship at Chrysler a long time ago, and it was amazing how inefficient they were, and the dinosaur mentality that existed. One of my sons did an 8 month coop at an auto company (engineer) and got a really good taste of why he wouldn't ever work for an auto company. This new division has the ability to shed some of that crap. We'll see if they really do.

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